By Mahmoud Salah and Mostafa Adel
Cairo – Mubasher: Egypt key interest rates are expected to be increased 0.5 - 1% by the Monetary Policy Committee tomorrow after the Central Bank of Egypt (CBE) devalued the pound to 8.85 per dollar on 14 March, analysts said.
Ramy Oraby, Economist at Mubasher Trade, expected (MCP) to push key interest rates up by 0.5-1% on 17 March, clarifying that the CBE acts on confronting an expected increase in inflation after Monday’s devaluation.
Hany Farahat, a senior economist at CI Capital in Egypt, also anticipated benchmark interest rates to rise by 0.5-1%.
Likewise, Hany Genena, the head of equities at Beltone Financial, saw a possible hike of interest rates by 100 points or 1%, assuring that the decision to value the pound against dollar will positively resonate across the Egyptian Exchange.
Unlike the most foreseen trend, Saeed Zaki, board member of Egyptian Gulf Bank, gave a different voice. He said the bank of Egypt is likely to keep interest rates on hold in order to promot deposit certificates with high returns of 12.5% and 15%. “Even if interest rates see a rise, it will be no more than 0.5%”, he presumed.
Earlier in 2016, the central bank said that consumer price index (CPI) monthly rose in February 1.1% month-on-month to 177.4 points. Meanwhile, the annual CPI fell in February to 9.5%, compared with 10.7 in January, 2016.
The core inflation rate annually rose 7.50% in February 2016, against 7.73% in January.
Translated by Ahmed El-Sayed Ali
